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clock Created with Sketch. 22/11/23
17:37
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Originally posted by filbert:
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TECHNICAL DISCUSSIONReasons to be bullish (cautious short term):→ It’s one of the most exciting gold exploration plays globally.→ There have been several positive drilling results over the past couple of months.→ The company has an experienced board and management team.→ Political stability remains a concern.→ A continuation pattern appears to be in its latter stages.Our last look at Predictive Discovery (PDI) was back in December last year. Back then buyers had stepped up just beneath a zone of support adding to the case for continued strength. It wasn’t the way forward which is why we’ve had the company on the backburner this year. It’s not to say the patterns are bearish, as it isn’t the case. Like many companies in the sector, the stock has enjoyed a solid rally over the past four months or so. We are going to concentrate on the weekly chart this evening as it shows more clarity. It is worth pointing out that low-volume goes hand-in-hand with this stock which is clear to see on the daily chart (not shown). Gaps and wide-ranging bars are commonplace which isn’t ideal from a pure pattern perspective. This timeframe takes a lot of that noise out.The headline on this chart is the cup & handle (C&H). It’s a large example but it should be working to a conclusion. They are solid continuation patterns, so it could set the stage for significantly higher prices over the coming months and years. If it is to form, we’d expect the left lip of the cup at $0.295 to be tagged before a period of consolidation commences. A sideways meander at those higher levels would allow the handle to form. Either way, in round numbers we’ll need to see a push up through $0.30 in a move that sticks before moving to a firmer bullish stance long term. Remember, this is the weekly chart so it’s going to take several weeks as a minimum before the C&H locks in – assuming it does. The good news is that the stock should continue to climb as the setup continues to form.One thing we must highlight is the fact that the company has suffered severe technical damage in the past. It’s likely the reason for the overlapping wave structures that have dominated over the past couple of years or so. As such, we believe a corrective pattern higher is unfolding. However, don’t let that put you off. A large corrective pattern on a weekly chart like this can offer excellent upside potential. Either way, waves-A and-B are in place, so the final leg higher at this degree of trend within wave-C should still be in its early stages. It could continue for several years as opposed to weeks or months. First of all, we need to see the cup & handle form which isn’t going to happen overnight.
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